NHS in England will struggle to make long-term savings, NAO warns

The NHS in England will struggle to make efficiency savings in future despite meeting targets in 2011/2, a report by the National Audit Office (NAO) has warned.

NHS Confederation chief executive Mike Farrar: 'The overall surplus for the NHS masks some of the major financial difficulties which some organisations are facing.'
NHS Confederation chief executive Mike Farrar: 'The overall surplus for the NHS masks some of the major financial difficulties which some organisations are facing.'

NAO report Progress in making NHS efficiency savings found that the NHS made efficiency savings of £5.8 billion in 2011/12, virtually all of the forecast savings of £5.9 billion.

However, it also found that up to £520m of the reported savings were non-recurrent or ‘one-off’ in nature. The report warned that in future it would be ‘increasingly difficult for the NHS to generate new efficiency savings’.

The report also warned that the DH did not know whether some savings were the result of demand being managed in ways which inappropriately restricted patient access to care.

It said: ‘Through our survey, PCTs reported they had introduced a variety of measures to manage demand, in most cases for clinical reasons. Some stakeholder bodies have raised concerns, however, that access is being restricted.’

The NAO said the DH should take a more active interest in demand management and develop ways to ensure that patients’ access to healthcare is not being inappropriately restricted.

The report said that the DH should also consider creating national access policies, so that any commissioners restricting access ‘can be held to account’.

It also called for the DH to clarify who would be responsible for overseeing clinical commissioning groups' (CCGs') efficiency saving plans.

‘The DH should clarify the arrangements for oversight of efficiency savings in the reformed NHS from April 2013,’ the report said.  

Commenting on the report, The King’s Fund chief economist John Appleby said: ‘This report echoes our own work which shows that the NHS has so far made good progress in meeting current savings targets but has a significant challenge ahead if it is to deliver £20bn in productivity gains by 2015.

‘As the report notes, efficiencies will become harder to deliver, as one-off savings such as cuts in management costs start to slow, and much will depend on whether pay increases continue to be restrained.’

NHS Confederation chief executive Mike Farrar said: ‘We are delighted that at this early stage, the NHS is on course to meet the challenging savings targets it has been set.

‘But the overall surplus for the NHS masks some of the major financial difficulties which some organisations are facing and many of the savings have been made through short term solutions.'

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